The Rev. Dennis H. Holtschneider, C.M., addresses the City Club of Chicago.

June 2, 2011

Good afternoon. My thanks to Jay Doherty, Paul Green, the members and board of the City Club of Chicago. It’s an honor to stand at this podium.

I love the city, not only for its architecture, its neighborhoods, and its culture. In my opinion, it’s a great city for its collective heart. With examples like the City Club, the Civic Committee, The Commercial Club, The Chicago Council on Global Affairs, the uncountable civic and non-profit boards, and the near-nightly fund-raisers for one organization or another, this is a city of people who step up and try to make a difference. I’ve never seen anything like it, certainly not on this scale. It’s a great testament to the concept of civic pride.

This afternoon, if I may, I’d like to applaud and echo the terrific presentation made by Chris Kennedy in March here at the City Club. For those who missed it, Chris described a virtuous cycle that higher education plays in great cities like Chicago. He pointed to Boston as an example of university presidents and the leaders of the business community working closely together to achieve transformative results for the economies of cities. He focused particularly on the importance of federal support for university-based, basic research, which creates applied research, which develops new technology that creates new businesses, which pay new taxes that, in turn, fund schools and new research initiatives so that the cycle repeats and is self-reinforcing. It’s not an efficient cycle, but it hits enough times to make a difference. It works in Boston because civic leaders, the business community and the presidents of its leading universities work together with elected officials in a partnership to benefit Boston and keep it vibrant.

It’s a useful strategy to create an environment where new industries can be built on the ideas emerging from our universities. I believe in the federal funding of basic research, and there is a long and proven track record of universities being an outstanding place to house such research. But if I were advising city and state economic planning, at least as it concerns higher education, I would also focus on smart workforce development, and do it through two avenues: strategic employment of financial aid dollars, and coordinated planning. I’ll explain each.

FINANCIAL AID PROGRAMS

There’s no question to me that regional economies can grow as new products and technologies are developed. But there’s also the issue of a workforce. Very cool things may have been developed in MIT’s nano-technology laboratory, but you can be very sure that no start-up industries would have taken root in Boston except for the fact that there was a highly educated workforce ready to be hired. If not, those discoveries, and their attendant factories and companies, would have gone elsewhere in the world.

It is no accident that Silicon Valley is the center of the universe for high tech companies – they’re staffed by numerous graduates from the University of California system as well as Stanford and other excellent schools. It’s the same in San Jose and Austin, Texas. Where there are sizeable universities educating the local populace, commercial enterprises are more likely to take root.

Groupon did not grow out of funding for university research, so much as it grew out of our business schools. United and I suspect, Boeing, didn’t relocate to Chicago to spin off technologies from our research universities, but they were convinced there was sufficient educated talent here to support their operations. When it comes to growing a local economy, the first and primary contribution of universities is and will likely remain an educated workforce.

The challenge then is to get that local population educated, and educated well. As we all know, a degree alone is not enough. The quality of learning matters. Companies aren’t looking for “a workforce,” they are looking for the “right workforce.”

In Illinois, like Massachusetts and New York, the private sector of higher education is a major player in that strategy.

· private non-profit institutions enroll 224,500 students,

· public institutions enroll 202,127.

· That’s a 53%-47% split

· (This does not include the for-profits)

· 55% of education degrees (bachelor and graduate) were earned at independent colleges

· 59% of health profession degrees (bachelor and graduate) were earned at independent colleges

· 55% of all minority students are in private institutions.

You get the idea. It would cost the state a great deal if we were forced to recreate this educational system inside its public institutions, and so, like many other states, Illinois created a system to assist state residents who attend these private colleges. The Monetary Assistance Fund, or MAP funds, are designed to assist students from Illinois families of great need to attend private institutions by giving them somewhere between $2,000 and roughly $4,500 depending on their financial situation. These are not large dollars when put against college tuitions, but they often make all the difference, when students work, seek other types of financial aid, and take out loans.

That’s been the social strategy in Illinois to create an educated workforce – a public system for a little under half the population and then shift the rest of the demand toward private institutions with these grants. For their part, the private institutions have stepped up and offered extensive financial assistance of their own.

That strategy is pretty stressed at the moment. As you can easily surmise, many more people in Illinois are now eligible for MAP since their family finances have been reduced in this economy. That forces the state to shrink the slices as they divide the pie – or the pool of funding - among a larger group of residents. And last week, the MAP funds were cut further after a disastrous attempt to save money by eliminating the “for-profit institutions from eligibility” and cutting the pool of funds by an equal amount. The measure eliminating for-profit institutions did not pass, but the proposed reduction in the overall funds did. The result is less funds shared by the original number of schools and ever more needy students.

I understand that Illinois’ financial woes are real, so I’m slower than some to beat the state over the head in these moments. I merely mention this to make clear that the private institutions are pretty stressed right now and some are looking for ways to survive. At DePaul, we’ve shifted money from our bottom line to assist those “MAP students,” who are already at DePaul and would have to drop out if their MAP funding was reduced. Since we specifically recruit first-generation students, and we are the largest private university in Illinois, we have a sizeable number of MAP recipients. We don’t run large margins, so it’s a significant commitment to pick up where the state left off. That’s where DePaul’s soft heart kicks in though. With St. Vincent de Paul’s name on our school, we don’t have the heart to tell students they need to drop out just because the state has reduced its aid.

Make no mistake, though. I do have the steel-heartedness to accept fewer new students in that situation. DePaul simply can’t make up for the state’s funding choices. In the end, the state will get whatever the state invests in. You don’t get more with less, you get less with less, and that’s certainly true when it comes to workforce education policy. DePaul gives $135 million of financial aid – of its own money each year. It’s a startling amount of money for a private institution, and we’re very proud of it, but even that has a limit.

The MAP partnership has been a good deal for the state up to now. For an investment of somewhere between $2,000 and $4,500 per student, the state sent its residents to universities like DePaul – and many private schools like DePaul - for a $30,000 education each year. We packaged the students with federal aid, work opportunities, our own institutional aid, and some loans – though less than you might think. And we got them a first-class education. In so doing, the state of Illinois got an educated resident for a whole lot less cost than they would have spent had these women and men gone to the public system.

DePaul and other members of the private sector play a powerful role in Illinois in workforce development. And this does not even recognize that we often serve as importers of talent. At any given time, DePaul has about 144,000 living alumni. About 97,000 of those live and work in greater Chicago. We are a powerful “net importer” of residents to Chicago. Since about a the third of our students who come from the other 49 states are not eligible for Illinois MAP financial aid, Illinois essentially gets these new educated residents for free.

But in the end, it’s that funding plan known as MAP – that partnership of the state and the private sector - that creates about 53% of the degrees granted in this state. 53%. There’s your educated workforce. MAP funding makes a huge difference to our economy. No work force, or wrong workforce - no new industries. You’ll understand then why I consider this not just an internal matter for the universities, but an economic matter for the region.

But I told you there were two approaches I’d focus on if I were advising on how higher education can leverage economic growth in the state. The second is not so much an agenda of the private higher education sector, but my own observation that we could leverage economic growth more effectively if we worked in a more coordinated fashion. In short, I’m going to suggest that city, state and regional planners put higher education in the room. For this, let me tell you some stories.

COORDINATED PLANNING

· When the Prime Minister of Bahrain invited DePaul to open a program, it was to help train their citizens in banking. We agreed, on the condition that we could educate Sunni and Shia and men and women in the same classroom. To their credit, they’ve always honored that agreement.

· When I met with the Education minister in Thailand, he spoke of the need for English language instruction for his citizens, in a country that is the least English-proficient in the region, and therefore at a disadvantage to attract international businesses to locate there.

· The Mayor of Amman Jordan knew our real estate market and development expertise, and came looking for it.

· The Education Minister for China spoke of our aviation law and intellectual property law expertise. We spoke to him about Mayor Daley’s wish that we prepare CPS teachers to teach Mandarin. He helped us create this program, and we continue to conduct programs in aviation law and intellectual property law.

Here’s the story… Other countries know how to ask higher education institutions for what they need to build the particular economies that they want to build. I’m very grateful that Mayor Emanuel is creating a faster-track approval process for university master plans. If asked, I’d encourage him to consider having the city take a lead in asking universities to cooperate with economic development plans. What kinds of businesses do we want to attract or home-grow within the city, and how can our universities create appropriate programs for it? Maybe it’s nano-technology. Maybe not.

· At DePaul, we’ve decided to build one of the great hospitality programs in the United States. There are only four others right now (Cornell, Florida, Texas and UNLV). Chicago’s the 3rd largest convention city. In the Midwest, the two largest programs are at Michigan State and Purdue, and neither one has a whole lot of tourism going on. We’ve already jumped to 400 majors in two years, and we’re already getting transfers from Michigan State, and I think we’re going to get a faculty member from there as well.

· We’ve decided several years ago to support making Chicago a gaming center – a computer gaming center, that is. We’ve now built one of the top computer gaming programs in the country, the only one recognized in the top 8 for its games in the U.S.

· We’ve created the largest graduate school of computer science in the U.S.

· We’ve invested strongly in digital media to support the film industry’s work here.

· We’ve launched new programs in environmental sciences and sustainability to support that new industry.

· We’ve changed the way we deliver communications degrees, seeing that the industry is asking something very different of its employees these days.

· We’re moving into health-related fields next. That field is changing rapidly as well, and we think we’re poised to make a contribution.

DePaul has grown from 15,000 to 25,000 students in recent years, and much of that growth is new programs. We’re sitting in our own planning meetings, judging where industry is going, figuring where the job opportunities may lie, and opportunistically investing in quite a few. It’s worked out well enough for us in recent years. But it’s completely different from my experience of speaking with world leaders. They think about where they want their local economies to grow and invite universities into partnership.

I can tell you this: If a planning office for Chicago called several of us together and said they wanted to build an educated workforce in a given area, I’d take that very seriously. I do in other countries, why not here?

CONCLUSION

In the end, I couldn’t agree more with Chris Kennedy’s “virtuous cycle” that shows how investment in basic research at research universities builds economies. It’s also true, however, that the major investment with the largest and most efficient payoff are efforts to use these universities to build the kind of workforce that truly serves the economy that you want to build. No workforce. Wrong workforce. No economic growth.

And if students lack the means to finance a high-quality college education, our economy will suffer for lack of well-prepared graduates in key fields. The virtuous cycle unravels.

The City Club can, and I hope will, invite presidents from more of our Chicago area universities to learn more about their contributions to the city and perhaps begin a conversation about how we can develop a triangular relationship among higher education, business and government. But more than that, I hope you’ll join me in urging our government and political leaders to help set the agenda to get our business community and our higher education community pulling in the same direction for the benefit of all Chicagoans. Chris Kennedy was right. The moment requires a critical mass of political, corporate and educational leaders if we are to remain focused on the broad goals that undergird Chicago’s and Illinois’ economy.

When we work together, we accomplish great things. Thank you, and God bless the City of Chicago.​​